The following graph shows the daily market for small cardboard boxes In Detroit.

Question

The following graph shows the daily market for small cardboard boxes In Detroit. Suppose that Vesoro is one of more than a hundred competitive firms in Detroit that produce such cardboard boxes. Based on the previous graph showing the daily market demand and supply curves, the price Vesoro must take as given is Fill in the price and the total, marginal, and average revenue Vesoro earns when it produces 0, 1, 2, or 3 boxes each day. The demand curve that Vesoro faces is identical to which of its other curves? Check all that apply. Marginal revenue curve marginal cost curve average revenue curve supply curve

Explanation / Answer

The graph shows that the equilibrium price level is $5. This, Vesoro should take $5.

Quantity Price TR MR AR (TR / Q)

0 - 0 - -

1 5 5 5 5

2 5 10 5 5

3 5 15 5 5

The demand curve in Perfect Competition is identical to Average Revenue Curve.(Option c)

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